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Friday, October 8th, 2010
1:35pm (EST)
Give the bulls credit. They are trying like hell to push this market though resistance.
Despite a nasty jobless claims report, 2 out of the 3 major indexes have pushed through our price targets as both the Dow and S&P 500 have cleared our fence. All we are waiting for is the Nasdaq, which seems to have a pants leg stuck in the barbwire, to confirm the jailbreak.
The Dow has broken 11,000 as the index has traded to a high of 11,016 and will need to close above this level to give the bulls a clear victory this week. The index is currently up 56 points and is a smidge over 11K at 11,009.
The S&P 500 has busted through 1,160 and is up 6 points to 1,164 and looks to be headed towards 1,175 and possibly 1,200.
However, the Nasdaq is at 2,399, up 16 points but just cleared 2,400, earlier, as we were heading to press.
Here were our thoughts yesterday:
“There is a feeling that the release of Friday’s monthly employment report will sway the market one way or the other but we think 3Q earnings will likely set the stage for where the market is headed over the short-term. We also have an uneasy feeling with the world currency debasing race that is currently going on and the parabolic moves gold, copper and silver are making is mind-blowing but we believe there could be some surprises, good and bad, that will dramatically impact the market over the next 3 weeks.”
Well, so far so good. It’s easy to be bullish in a market like this and while we would turn bullish (short-term) if the 3 major indexes CLOSED above our price targets, we are also aware that it will be vital to carry some kind of put option protection going forward.
It’s hard for investors to remember the bad times when the good times are so good right now, but, it was only 2 years ago this week that the Dow dropped 18% in a week. In other words, the index fell nearly 1,900 points in five days.
There is a saying that “history repeats itself” and often times in the market or in certain stocks, a pattern or history is repeated. We aren’t saying history will repeat itself…all we are saying is in this environment, strangles and straddles option trades will be your BEST FRIEND.
The strategies involve the purchase of both a call and put option which allows you security as long as the market is volatile. Check. We have that folks. In other words, you don’t have to know which way a stock or the market is going to have to move. You want volatility and huge price swings. Check.
This weekend there will be a number of important events taking place concerning the world’s currency and the market will be closed Monday.
Next week, Intel (INTC, $19.51, up $0.11) will report earnings on Tuesday (after the bell) along with Fastenal (FAST, $54.64, up $1.94). FAST which will report BEFORE the bell and the 52-week high is $56.65. If the bulls are still dancing and the two companies get “A’’’s on their earnings report cards, then look for Dow 11,300; Nasdaq 2,500; and S&P 1,200 over the near-term.
If some unexpected news or event happens over the weekend, or if Intel MISSES Wall Street’s estimates, then the market could retreat back into the 4-month long trading range, or worse.
Either way, we think 3Q earnings season will be intense and loaded with some GREAT opportunities to make some money on both call AND put options. We plan on using a combination of both (strangles and straddles) but we will also be playing some directional trades straight up.
Remember, we teach these kind of option strategies in our new trading manual “How to Trade Options on Momentum Stocks” which is available NOW with a FREE 1-month membership included (a $129 value).
We will be releasing our first video this weekend for those of you have ordered our course. Details will be emailed to you and we plan to cover the upcoming earnings season and how to find trades, as well as an overview on strangles and straddle option strategies which are covered in our option manual.
Have a great weekend everyone and get ready for some action over the next 3 weeks!
Tags: explain the concept of options, INTC, Intel, momentum options trading, option picks, option trading blog, option trading course, option trading courses, straddle option trades, strangle option trades, triple-digit options returns
Posted in Earnings, Market Analysis, Market Commentary | Comments Off
Thursday, August 19th, 2010
9:00am (EST)
The bears were looking to turn the tables following Tuesday’s rally and started off strong on Wednesday before giving up slight gains to the bulls. Things stayed in a tight range as neither side wanted to bet the house ahead of this morning’s unemployment numbers.
The Dow was down 75 points at the start of the session and at one point was up nearly 70 points before settling with a 10 point gain to close at 10,415. The S&P 500 added 2 points to finish at 1,094 while the Nasdaq chipped in with a touchdown to close at 2,215. Although the bulls showed a little muscle, the S&P 500 still had trouble with the 1,100 level (once again) and volume was absolutely terrible.
Of course, the big news this morning is the weekly jobless claims number which has moved higher for the past two weeks. Check that. Make it the past three weeks.
Wall Street was expecting to see 478,000 claims, down from last week’s 484,000 but the number came in at 500,000. Not good.
Futures were pointing towards a decent open for the bulls as they were higher before the 8:30am (EST) release but turned a dime and headed south once Wall Street got the news. Dow futures were up nearly 50 points before the news and are now down 26 points to 10,326. S&P 500 futures are down 4 points to 1,083 while the Nasdaq 100 futures are off by 3 points to 1,834.
In other economic news due out this morning, watch for the Philadelphia Fed survey and leading indicators, which are due out at 10am (EST).
As far as our featured Blog title this morning, two words we love hearing together are “Hostile” and ”Takeover”.
BHP Billiton’s (BHP, $68.18, down $2.03) has gone hostile over Potash (POT, $147.93, up $4.76) after the company’s big wigs rejected a $40 billion takeover offer on Tuesday. On Wednesday, BHP fired back and took their $130 a share offer directly to the shareholders despite the stock trading near $150. Ah, yeah. We doubt the “little guys” will take $130 from the corporate dudes when they could sell their shares on Wall Street at the current market price, or 15% more.
Potash’s board said the offer, which was submitted on August 12, ”substantially undervalues” the company and its prospects. And now that shares are pushing $150, a bid north of $200 will probably have to be put on the table. After all, Potash will tell you at one point their stock was trading at $230 a couple of years ago.
Potash will have two months to accept the deal but also went on the offensive and announced a shareholder-rights plan. The “shield” would limit any one shareholder from owning 20% of the company. However, since Potash is based in Canada, BHP could lobby to have the plan tossed. Stay tuned.
The other big story this morning is Intel (INTC, $19.59, up $0.06), who has agreed to buy McAfee (MFE, $29.93, up $0.01) for nearly $8 billion, or a 60% premium from Wednesday’s closing price. Shares of McAfee are up $17 to $47 in pre-market action.
As usual, we have a lot to cover in our Members Area so let’s get to it.
Tags: BHP, Hostile Takeovers, INTC, Intel, MFE, option picks, POT, stock options trading
Posted in Economic News, Mergers and Acquisitions | Comments Off
Wednesday, April 14th, 2010
9:00am (EST)
The bulls were determined to close Tuesday with a win and after it was all said and done they did exactly that.
The market started off in negative territory and was making a push towards breakeven before a rumor hit that Big Ben was going change the “extended period” language in the Fed’s fiscal policy next time out.
The bears had every opportunity to step in and take control but they were met by bulls that were ready to buy off the lows.
As a result, the Dow managed to post a 14 point gain, or 0.1%, and settled at 11,019 while maintaining a hold on the psychologically significant 11,000 level. The index traded to a low of 10,947 before touching another fresh 52-week high of 11,038.
The S&P 500 added a point and closed at 1,197 after trading to a high of 1,199. The index looks poised to break 1,200 today; more on that in a minute. The Nasdaq managed to post the strongest gains by adding 0.3%, or 8 points, to finish at 2,465.
We haven’t really concerned ourselves with the economic news so far this week because earnings are going to set the market’s tone for the rest of April. Yesterday though, the Commerce Department said the U.S. trade deficit expanded over 7% to $40 billion in February, exceeding expectations. The gap was widened, in part, by a 3.1% increase in imports of consumer goods during the month, suggesting consumer demand and spending are on the up-and-up.
Of course, the big news this morning is Intel’s (INTC, $22.77, up $0.23) numbers. The company said after the market closed Tuesday that it earned $2.4 billion, or $0.43 a share, versus $629 million, or $0.11 a share, in the year-ago period. Wall Street was expecting profit of $0.38 a share.
Intel’s revenue came in at $10.3 billion, ahead of analysts’ forecast for $9.8 billion, with gross margins topping 60+%. It was an incredible quarter and Intel said all the right things. In pre-market trading, shares are at $123.82, up $1.05.
The Intel news, and a great JPMorgan (JPM, $45.87, down $0.27) earnings report, have futures soaring before the bell which should lead to a strong open.
Dow futures are up 41 points to 11,005 while the S&P 500 futures are showing a 6 point pop and are at 1,199. The Nasdaq 100 futures are higher by 14 points to 2,015.
Subscribers, check the Members Area for the updates.
Tags: INTC, INTC earnings, Intel, JPM, option picks, option signals, options alerts, stock options trading
Posted in Company Commentary, Earnings, Market Commentary | Comments Off
Wednesday, December 16th, 2009
1:15pm (EST)
The bulls got a gift this morning as the consumer price index (CPI) for November showed a benign consumer inflation outlook and November housing starts were up.
Consumer prices excluding food and energy were flat in November, signaling that inflation isn’t working its way into the economy. It was the first time that “core” inflation was unchanged after 10 straight monthly increases.
Meanwhile the Commerce Department said construction of homes and apartments rose 8.9% last month.
At midday, the Dow is up 22 points to 10,474, the Nasdaq is showing a 14 point gain to 2,214, while the S&P 500 was up 6 to 1,113.
As far as specific stocks, the Federal Trade Commission is back on Intel’s (INTC, $10.40, down $0.40) case as it has charged the company with illegally using its dominant market position to stifle competition and strengthen its monopoly.
The big news will hit the market in about an hour as the Federal Reserve policymakers wrap up a two-day meeting on our current interest rate policy. Wall Street is expecting the Fed will hold rates near zero.
The Fed’s statement is expected at 2:15pm (EST).
We will be paying close attention to the news and we’ll be back in the morning with all of the trade updates.
Tags: call option trading, chicken option trades, Covered Calls, Intel, momentum stock option trading, option trade picks, option trading online, options blog, options mentoring, options newsletters, options track record, put option trading, Rick Rouse, stock option trade pick service, straddle option trades, strangle option trades, support and resistance levels, triple-digit option trades
Posted in Company Commentary, Economic News | Comments Off
Thursday, November 12th, 2009
12:50pm (EST)
Intel (INTC, $19.88, up $0.04) and Advanced Micro Devices (AMD, $6.51, up $1.19) have buried the hatchet after agreeing to end all outstanding legal disputes between the companies, including antitrust litigation and patent cross license disputes.
This was certainly a surprise and as you can see, investors think AMD benefited the most. And why wouldn’t they? Intel will also be reaching in its pocket to pay AMD $1.25 billion.
Intel was up over $20 earlier this morning but is pretty much flat while AMD is holding its 20% pop. Here is what the two companies had to say:
“While the relationship between the two companies has been difficult in the past, this agreement ends the legal disputes and enables the companies to focus all of our efforts on product innovation and development.”
Under terms of the agreement, AMD and Intel basically have a new 5-year cross license agreement deal and both parties will give up any claims of breach from the previous license agreement.
It would have been sweet to have gotten in the AMD November 5 calls (AMDKA, $1.50, up $1.09) YESTERDAY as they are up 265% today but don’t go chasing…
We were stopped out of our Wal-Mart (WMT, $53.57, up $0.60) trade this morning for a 17% profit but many of you wrote to say your returns were much better. Some of you made upwards of 50% which brings up a good point. We often get emails saying there is no way you can duplicate our portfolio results (which can be viewed anytime) but here is an example of where subscribers did make better returns.
It also happened with Priceline.com (PCLN, $199.77, up $2.97) as some of you made over 500%. So, see, it all depends on the market and what YOU feel comfortable with and what your exits and entries are.
Look, we are going to put you in a lot of good trades and everybody is going to have different results. Our goal is to make you money and you can never go broke by taking a profit. If you take profits you always have another trade and that is what we do. We trade and we don’t fall in love with a position.
The Dow is currently down 47 points to 10,243 as we head to press but we see some more trades on the horizon. Current subscribers, please check the Members Area for the update on Wal-Mart.
Tags: AMD, Intel, momentum options, MomentumOptionsTrading.com, option trading picks, options help, options mentoring, options track record, options trading, Priceline.com, trading options
Posted in Company Commentary, Earnings, Market Analysis, Mergers and Acquisitions, Option Trades | Comments Off
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Rollout The Red Carpet…Dow 11,000 Hit
Friday, October 8th, 2010
1:35pm (EST)
Give the bulls credit. They are trying like hell to push this market though resistance.
Despite a nasty jobless claims report, 2 out of the 3 major indexes have pushed through our price targets as both the Dow and S&P 500 have cleared our fence. All we are waiting for is the Nasdaq, which seems to have a pants leg stuck in the barbwire, to confirm the jailbreak.
The Dow has broken 11,000 as the index has traded to a high of 11,016 and will need to close above this level to give the bulls a clear victory this week. The index is currently up 56 points and is a smidge over 11K at 11,009.
The S&P 500 has busted through 1,160 and is up 6 points to 1,164 and looks to be headed towards 1,175 and possibly 1,200.
However, the Nasdaq is at 2,399, up 16 points but just cleared 2,400, earlier, as we were heading to press.
Here were our thoughts yesterday:
“There is a feeling that the release of Friday’s monthly employment report will sway the market one way or the other but we think 3Q earnings will likely set the stage for where the market is headed over the short-term. We also have an uneasy feeling with the world currency debasing race that is currently going on and the parabolic moves gold, copper and silver are making is mind-blowing but we believe there could be some surprises, good and bad, that will dramatically impact the market over the next 3 weeks.”
Well, so far so good. It’s easy to be bullish in a market like this and while we would turn bullish (short-term) if the 3 major indexes CLOSED above our price targets, we are also aware that it will be vital to carry some kind of put option protection going forward.
It’s hard for investors to remember the bad times when the good times are so good right now, but, it was only 2 years ago this week that the Dow dropped 18% in a week. In other words, the index fell nearly 1,900 points in five days.
There is a saying that “history repeats itself” and often times in the market or in certain stocks, a pattern or history is repeated. We aren’t saying history will repeat itself…all we are saying is in this environment, strangles and straddles option trades will be your BEST FRIEND.
The strategies involve the purchase of both a call and put option which allows you security as long as the market is volatile. Check. We have that folks. In other words, you don’t have to know which way a stock or the market is going to have to move. You want volatility and huge price swings. Check.
This weekend there will be a number of important events taking place concerning the world’s currency and the market will be closed Monday.
Next week, Intel (INTC, $19.51, up $0.11) will report earnings on Tuesday (after the bell) along with Fastenal (FAST, $54.64, up $1.94). FAST which will report BEFORE the bell and the 52-week high is $56.65. If the bulls are still dancing and the two companies get “A’’’s on their earnings report cards, then look for Dow 11,300; Nasdaq 2,500; and S&P 1,200 over the near-term.
If some unexpected news or event happens over the weekend, or if Intel MISSES Wall Street’s estimates, then the market could retreat back into the 4-month long trading range, or worse.
Either way, we think 3Q earnings season will be intense and loaded with some GREAT opportunities to make some money on both call AND put options. We plan on using a combination of both (strangles and straddles) but we will also be playing some directional trades straight up.
Remember, we teach these kind of option strategies in our new trading manual “How to Trade Options on Momentum Stocks” which is available NOW with a FREE 1-month membership included (a $129 value).
We will be releasing our first video this weekend for those of you have ordered our course. Details will be emailed to you and we plan to cover the upcoming earnings season and how to find trades, as well as an overview on strangles and straddle option strategies which are covered in our option manual.
Have a great weekend everyone and get ready for some action over the next 3 weeks!
Tags: explain the concept of options, INTC, Intel, momentum options trading, option picks, option trading blog, option trading course, option trading courses, straddle option trades, strangle option trades, triple-digit options returns
Posted in Earnings, Market Analysis, Market Commentary | Comments Off